Israeli police arrest five in $5m WhatsApp crypto probe
Police say the group used fake loan papers to hide transfers of 16m shekels, or $5m, into bank accounts.
Key takeaways
- 1Five suspects arrested in a WhatsApp-based crypto scheme.
- 2The scheme handled 16m shekels, about $5m, in crypto transactions.
- 3Police seized crypto wallets, computers and tens of thousands of shekels in cash.
- 4Investigators allege use of fictitious loan agreements to disguise proceeds.
- 5Charges include money laundering, fraud and unlicensed financial asset services.
Israeli police arrested five people on Tuesday in a money laundering investigation involving 16 million shekels, roughly $5 million, in crypto transactions arranged through a WhatsApp group, the National Unit for Combating Economic Crime within Lahav 433 said.
Investigators said the suspects provided crypto trading services without a licence and failed to report the activity to the Israel Tax Authority. They alleged the group created fictitious loan agreements to disguise the crypto proceeds and moved the funds directly into personal bank accounts. The unit said the group used the chat app to coordinate trades and settlement instructions, bypassing regulated exchanges.
Police seized cryptocurrency wallets, computers and tens of thousands of shekels in cash during raids on the suspects’ homes. The seized devices are being examined for transaction records and links to other participants. Investigators questioned the five on suspicion of money laundering, fraud and providing financial asset services without a licence.
The arrests follow two detentions by the Israel Tax Authority on Oct. 6, also linked to alleged non-reporting of crypto activity. One case involved trades worth tens of millions of dollars. In the other, an Ashdod resident allegedly failed to report income from about $13 million in crypto trades between 2019 and 2021.
A 2024 audit by Israel’s State Comptroller found that roughly 500 people reported crypto activity each year from 2018 to 2022, out of an estimated 200,000 potential filers. The report warned that low reporting rates could erode tax revenues. Authorities say the case will inform future enforcement of licensing and tax rules for unregistered crypto services.
Police said the investigation is ongoing. Charges of money laundering, fraud and unlicensed financial asset services are expected. Legal experts say similar actions may prompt tighter oversight of informal crypto channels such as messaging apps.
Reported and edited by the YourKhabri desk under our editorial policy. Nothing here is investment advice.